As already discussed in earlier posts today, the American owners of debt-ridden Liverpool FC, Tom Hicks and George Gillett, have won a temporary restraining order in Texas state court to block the sale of the club to New England Sports Ventures (NESV).
The news emerged at around 9pm UK time by way of a statement published on law firm Fish & Richardson's website. The statement is reproduced in full below:
'The owners of Liverpool Football Club today reported that a Texas State District Court has granted a temporary restraining order (TRO) enjoining the Board of Liverpool Football Club (LFC) from executing a sale of the Club to New England Sports Ventures (NESV). The court set a hearing date of October 25, 2010.
'The TRO request, signed by Judge Jim Jordan of the 160th District Court in Dallas, was part of a lawsuit filed ... against Royal Bank of Scotland (RBS), Martin Broughton, Christian Purslow, Ian Ayre, NESV and Philip Nash. The lawsuit also seeks temporary and permanent injunctions, and damages totalling approximately $1.6 billion (over £1 billion).
'The suit lays out the defendants' "epic swindle" in which they conspired to devise and execute a scheme to sell LFC to NESV at a price they know to be hundreds of millions of dollars below true market value (and well below Forbes magazine's recent independent $822 million valuation of the club) -- and below multiple expressions of interest and offers to buy either the club in its entirety or make minority investments (including Meriton and Mill Financial).
'It describes how the defendants excluded the owners from meetings, discussions and communications regarding the potential sale to NESV and interfered with efforts by the owners to obtain financing for Liverpool FC.
'The Club's owners are represented by attorneys from the international law firm of Fish & Richardson.
'The following are some of the key points in the complaint, which details the roles of RBS and the other defendants, and also describes previously undisclosed offers to purchase LFC:
'The Director Defendants were acting merely as pawns of RBS, wholly abdicating the fiduciary responsibilities that they owed in the sale.
'RBS has been complicit in this scheme with the Director Defendants. For example, in letters from RBS to potential investors obtained just within the past few days, RBS has informed investors that it will approve of a deal only if there is "no economic return to equity" for Messrs. Hicks and Gillett.
'In furtherance of this grand conspiracy, on information and belief, RBS has improperly used its influence as the club's creditor and as a worldwide banking leader to prevent any transaction that would permit Messrs. Hicks and Gillett to recover any of their initial investment in the club, much less share in the substantial appreciation in the value of Liverpool FC that their investments have created.
'On or about October 4, 2010, Mr. Hicks received a letter of interest from a third potential purchaser represented by FBR Capital Markets (FBR), offering to purchase Liverpool FC for £375 to £400 million ($595 to $635 million).
'The letter informed Mr. Hicks that the potential purchaser would not need financing, possessed the funds to close the transaction, and intended to build a new stadium for Liverpool FC.
'Additionally, the Plaintiffs learned just days ago about another potential investor that made a similar offer in the £350 to £400 million range that was communicated to Defendant Broughton and another unnamed co-conspirator in late August.
'According to this investor, Mr. Broughton never responded to the offer. Moreover, when the purported sale to NESV was announced, this investor again contacted Mr. Broughton and informed him that the offer, which significantly exceeded the NESV offer, was still on the table. Again, Mr. Broughton brushed this offer aside without further discussion."
Reaction from independent directors
Broughton, Purslow, Ayre, and Nash have all expressed their regret that the court granted the TRO. They issued a joint statement at around 11.30pm last night stating that they had "resolved to complete the sale of Liverpool FC to New England Sports Ventures".
They also said that they consider the restraining order to be "unwarranted and damaging" and will "move as swiftly as possible to seek to have it removed".
Links:
- Liverpool Football Club owners win Texas court injunction to stop sale to Boston Red Sox (The Solicitor)
- Details of the high court verdict against the owners of Liverpool Football Club (The Solicitor)
- Press release: Texas court grants temporary restraining order halting sale of Liverpool Football Club: Owners also seeking $1.6 billion in damages calling LFC sale plan an "epic swindle"(Fish & Richardson P.C.)
- Find a solicitor (Contact Law)
